MARYLAND STATE BAR ASSOCIATION, INC.
COMMITTEE ON ETHICS
ETHICS DOCKET NO. 2001-15
The ramifications of accepting credit card payments for retainers and fee payments.
Your inquiry raises the issue of the ramifications of accepting credit card payments for retainers and fee payments. You are specifically concerned about the fees charged for each transaction and any charge backs that might be made to your escrow account.
It should be initially noted that the Committee finds nothing unethical, per se, in accepting a credit card payment for either a fee or retainer. This arrangement is simply a matter of contract between the attorney and the client. Who pays the service fee related to the use of the credit card would also be a matter of contract between the attorney and the client, and in the Committee’s opinion would have to be clearly disclosed to the client. The opinion of the Committee is in conformity with that found in the ABA formal opinions, see formal opinion 93-379 (December 6, 1993). I am taking the liberty of attaching a copy of this opinion for your review.
Rule 16-607 of the Maryland Rules provides in relevant part: “a. General prohibition. An attorney or law firm may deposit in an attorney trust account only those funds required to be deposited in that account by Rule 16-604 or permitted to be so deposited by section b. of this Rule.
b. Exceptions. 1. An attorney or law firm shall either (A) deposit into an attorney trust account funds to pay any fees, service charges, or minimum balance required by the financial institution to open or maintain the account, including those fees that cannot be charged against interest due to the Maryland Legal Services Corporation Fund pursuant to Rule 16-610 b 1 (D), or (B) enter into an agreement with the financial institution to have any fees or charges deducted from an operating account maintained by the attorney or law firm. The attorney or law firm may deposit into an attorney trust account any funds expected to be advanced on behalf of a client and expected to be reimbursed to the attorney by the client.
2. An attorney or law firm may deposit into an attorney trust account funds belonging in part to a client and in part presently or potentially to the attorney or law firm. The portion belonging to the attorney or law firm shall be withdrawn promptly when the attorney or law firm becomes entitled to the funds, but any portion disputed by the client shall remain in the account until the dispute is resolved.”
Unless the attorney and the client have entered into an agreement where under the client has agreed to be responsible for any charge related to use of the credit card or any charge back with respect thereto, it would appear that counsel would be obligated to deposit sufficient funds to cover the difference between a retainer or fee amount and the amount received from the client less the credit card fee or a charge back. The Rule entitles you to make this payment from your operating account.
We trust that this opinion is fully responsive to the questions raised in your inquiry.